Animal nutrition contributes to strong Q1 results for Cargill

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Net income for the US giant increased 66% to $852m in the first quarter ended 31 August from $512m some 12 months earlier.  

Its operating profit rose to $827m from $611m, excluding items.

The animal nutrition and protein segment was said to be the largest contributor to adjusted operating earnings in Q1 2017, with results up sharply from the prior year.

Aqua feeds

Cargill reported animal nutrition sales growth in parts of Asia and in North America for the period. It said sales volume for aqua feeds was reduced by weather-related events in some countries though.

However, the segment’s new aqua nutrition business, formerly EWOS, was said to offset part of that negative sales impact due to good performance in its high-value functional feeds and in raw material sourcing.

Its beef business reportedly benefited from the North American market’s ongoing transition to increased cattle supplies as well as renewed consumer demand for beef, while the global poultry businesses, along with US based turkey and further processed eggs, delivered increased earnings over the prior year.

Earnings from origination and processing earnings rose moderately from last year’s first quarter, due in part to the realization of improved soybean processing margins in the period, said the Minnesota based company.  

Its results were also boosted by good performance in Brazil, North American grain exports, canola in Canada, and biodiesel in North America and Europe.

Divestment of oilseed crushing facilities

Cargill is selling its soybean and rapeseed crush, oil refining and related bulk storage assets in Amsterdam, and soybean crush facility in Brest, France to Bunge.  The deal is awaiting regulatory clearance from the EU.

Cargill is retaining its soybean processing plants in Barcelona, Spain, and Liverpool, UK, as well as other oilseed processing and refining facilities in Europe.

David MacLennan, Cargill’s chief executive officer, said: “We’ve been charting a new path to higher performance, and it’s rewarding to see the many changes we’ve made resulting in gains across much of the company.”

Louis Dreyfus Commodities, another one of the big four agri-trading companies globally along with Cargill, Bunge and ADM, posted an small increase in net profit last week, but it stressed the external environment remained difficult during the first half of 2016. It cited challenges such as growth slowing in China, the US’ recovery failing to fully spread to other major economies, and numerous instances of political instability and geopolitical tensions.

Bunge and ADM are set to publish their financial results in a few weeks.

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